"I have had to ensure no laws of nature are violated, create prototypes, test, make sure the product is safe, get capital outlays approved, etc. etc."

As an ME in training this seems absolutely backward. To "ensure no laws of nature are broken" makes you sound like a wizard rather than someone who uses his understanding OF the laws of nature to create something. You don't 'violate' laws of nature, you use conclusions based on their unavoidable existence to control how you approach a problem. The rest of the quote sounds exactly like normal work of an engineer, what's so special about that?

"I wonder if "innovation" in the case of US Messenger Bag is nothing more than a different look to the product, or maybe a new flap or pocket - basically a fashion change with a little function thrown in. In which case it requires no more than a stylist/marketing effort and a few material and machine programming changes to implement. If true, coming out with a new style frequently is no big deal."

That's only incremental innovation, it's nice sure, but it doesn't move the company forward. Initial designs of a bag will have to consider specific constraints: strength of the materials, how they are joined, size of the compartments, positioning of accessory compartments, length of strap, just to name a few obvious ones. If a design is good it will both have considered the important design variables as well as implemented them in a way which is powerful.

Then of course comes the "foreign company" who has "cheap labor" who can copy your designs. Ignoring the benefits some people talked about in other comments about brand devotion, it's possible that you would go out of business if you merely kept selling this design. Doing this however ignores your strenghts.

As the bag company you already went through the work of designing this great bag. Because of it's success you know what matters when making that bag, and you know how to address those problems in an efficient matter. The company copying you knows none of this. What you should do, and what this company does appear to be doing, is to use these criterion to expand their market. Ok, they made a good laptop bag, but what about other bags? Because of their success in the laptop bag market, they probably have the tools to be successful in the backpack market. That is innovation, because it takes their developmental advantage to consistently create a product that will be ahead of the game.

Take the example of Apple. I am not a fan of their products, but i recognize that the reason they are successful is that they have been able to consistently build (somewhat elitist) quality (this is the important part) products that are ahead of the competition, because of their developmental understanding of their last product.

I suppose rather than saying innovation simply starts with an itch, it would be more correct to say that innovation is led by itches, as a company sees the progressively wider expanse of how they can take advantage of their strengths in the market.

This is somewhat odd, seeing as at the core no facebook photo is "private." The difficulty is only in getting the links to the photos. Try it for yourself, right click on any photo seen on facebook (or any site for that matter) and choose the option pertaining to the image URL (differs by browser). This gets you a direct link to an image, so while it does not have all the fancy stuff you can do in facebook, you can view it just fine.